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State Name: Washington
State Name underscore: Washington
State Name dash: Washington
State Name lower underscore: washington
State Name lower dash: washington
State Name lower: washington
State Abbreviation: WA
State Abbreviation Lower: wa

In the absence of econ data or over market-moving headlines, we're left to line up the most likely suspects to account for today's action. With MBS just 2 ticks up on the day and 10yr yields 2bps lower, there's not much action in the first place, but a nice enough reversal from earlier weakness.

Two of the most likely suspects include sell-offs in global stock markets and forced buying in European and domestic bond markets. True to form for a Treasury rally drawing strength from European bond markets, Treasuries began moving off their best levels just after German Bunds closed.

It's not just about Bunds though. The Dax tanked mightily as well, and ended the day at the same time. It traded in lock-step with US equities markets as well, so we have large-scale global "risk-off" move (sell stocks, buy bonds) that further tripped short-covering stops for Treasuries (levels at which traders who were betting on rates moving higher are forced to buy to protect against further loss).

Bond markets continue to look "done" with attempts to shoot the moon. These culminated in the aforementioned European close(s) heading into 12:30pm. Since then, MBS are 3-5 ticks weaker, but still 5 ticks higher than morning rate sheet print times. The pull back should allow any lenders who'd been holding off on a reprice to get on the board, if they were planning on it in the first place. (In other words, some lenders will wait for a rally to level-off markedly before issuing a positive reprice, and we've certainly seen such a 'leveling-off.')

Category: MBS, UPDATE

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3/24/14

Bond Markets Trudge Back into Positive Territory

MBS and Treasuries continue exploring their post-FOMC ranges, with both opting to stay contained by previous highs and lows. The weaker opening levels brought yields near Friday's highs and MBS prices closer to recent lows. Weaker stock markets after the 9:30am cash open have coincided with a push back into positive territory for bond markets.

This makes the 3-day trend "sideways to slightly positive and Fannie 4.0s are just now breaking decidedly into positive territory day-over-day. Fannie 4.0s are up 2 ticks at 103-28, but because they began in negative territory, they're up 5 ticks from morning rate sheet print times, making positive reprices possible--even 'likely' for some lenders.

Category: MBS, UPDATE

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3/24/14

Bond Markets Holding Ground After Weakening Slightly Overnight

Treasuries began the overnight session moving slightly higher in yield despite weaker manufacturing data out of China. Even in the European session, domestic bond markets continued going against the grain with 10yr yields rising just slightly during the same time German 10yr bonds fell from 1.65 to 1.62.

The paradoxical departures from overnight events speaks to one of two things. Either we're seeing some accommodation built in to trading levels for this week's upcoming Treasury auctions or we're still coping with negative momentum from last week's forceful shake-up in the Treasury yield curve.

In fact, both factors are probably in play (pre-auction weakness and general momentum), though both are much ado about nothing in the context of March's movements. In fact, in that context, we're still waiting to see what bond markets do following last Wednesday's initial sell-off, because so far, they've simply been perfectly sideways.

Today's iteration of "sideways" sees MBS paying back a bit of Friday's rally, with Fannie 4.0s down 5 ticks so far this morning at 103-22. 10yr yields are currently up just under 2bps at 2.77.

There are no significant events on the calendar today and volume has been average. The only real market movement cues we have are market movements themselves. In that regard, nothing has yet happened to change the 'sideways' vibe, albeit at slightly weaker levels than Friday.

In the absence of econ data or over market-moving headlines, we're left to line up the most likely suspects to account for today's action. With MBS just 2 ticks up on the day and 10yr yields 2bps lower, there's not much action in the first place, but a nice enough reversal from earlier weakness.

Two of the most likely suspects include sell-offs in global stock markets and forced buying in European and domestic bond markets. True to form for a Treasury rally drawing strength from European bond markets, Treasuries began moving off their best levels just after German Bunds closed.

It's not just about Bunds though. The Dax tanked mightily as well, and ended the day at the same time. It traded in lock-step with US equities markets as well, so we have large-scale global "risk-off" move (sell stocks, buy bonds) that further tripped short-covering stops for Treasuries (levels at which traders who were betting on rates moving higher are forced to buy to protect against further loss).

Bond markets continue to look "done" with attempts to shoot the moon. These culminated in the aforementioned European close(s) heading into 12:30pm. Since then, MBS are 3-5 ticks weaker, but still 5 ticks higher than morning rate sheet print times. The pull back should allow any lenders who'd been holding off on a reprice to get on the board, if they were planning on it in the first place. (In other words, some lenders will wait for a rally to level-off markedly before issuing a positive reprice, and we've certainly seen such a 'leveling-off.')

MBS and Treasuries continue exploring their post-FOMC ranges, with both opting to stay contained by previous highs and lows. The weaker opening levels brought yields near Friday's highs and MBS prices closer to recent lows. Weaker stock markets after the 9:30am cash open have coincided with a push back into positive territory for bond markets.

This makes the 3-day trend "sideways to slightly positive and Fannie 4.0s are just now breaking decidedly into positive territory day-over-day. Fannie 4.0s are up 2 ticks at 103-28, but because they began in negative territory, they're up 5 ticks from morning rate sheet print times, making positive reprices possible--even 'likely' for some lenders.

Treasuries began the overnight session moving slightly higher in yield despite weaker manufacturing data out of China. Even in the European session, domestic bond markets continued going against the grain with 10yr yields rising just slightly during the same time German 10yr bonds fell from 1.65 to 1.62.

The paradoxical departures from overnight events speaks to one of two things. Either we're seeing some accommodation built in to trading levels for this week's upcoming Treasury auctions or we're still coping with negative momentum from last week's forceful shake-up in the Treasury yield curve.

In fact, both factors are probably in play (pre-auction weakness and general momentum), though both are much ado about nothing in the context of March's movements. In fact, in that context, we're still waiting to see what bond markets do following last Wednesday's initial sell-off, because so far, they've simply been perfectly sideways.

Today's iteration of "sideways" sees MBS paying back a bit of Friday's rally, with Fannie 4.0s down 5 ticks so far this morning at 103-22. 10yr yields are currently up just under 2bps at 2.77.

There are no significant events on the calendar today and volume has been average. The only real market movement cues we have are market movements themselves. In that regard, nothing has yet happened to change the 'sideways' vibe, albeit at slightly weaker levels than Friday.

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